Exploitation of Capabilities and Opportunities

KEMI-TORNIO UNIVERSITY OF APPLIED

SCIENCES

Exploitation of Capabilities and Opportunities When Exploring

Strategic Alternatives in R&D:

Case Company

Antti Jarva

Master´s Thesis of the Degree Programme in International Business Management

Master of Business Administration

TORNIO 2011

ABSTRACT

Jarva, Antti. 2011. Exploitation of Capabilities and Opportunities When Exploring

Strategic Alternatives in R&D: Case Company. Master's Thesis. Kemi-Tornio

University of Applied Sciences. Business and Culture. Pages 61.

The main objective of the Thesis is to analyze the Case Company and to construct

strategic suggestions to stay competitive. The focus is on exploitation of capabilities and

opportunities. Additionally, the Thesis investigates whether the efficiency of utilized

resources could be improved further. The strategic suggestions and opportunities for

improvement are meant to be beneficial also for the parent company.

The Thesis is based on a qualitative research approach. The successful research and

development history with major technological shifts in the dynamic industry lay the

foundation for this exploratory case study. The theoretical framework was obtained by

relevant articles, books and studies. The empirical information was gained through

interviews, observations and experiences of my own. The analytical framework

comprises external and internal strategic evaluations. Analysis results include

organizational strengths and weaknesses, industry specific and social opportunities, and

threats. Strategic suggestions are formulated by exploring the most feasible strategic

alternatives created. Opportunities for improvements are built for main weaknesses.

The results of this study show that the Case Company needs a strategy. It would

motivate employees and increase entrepreneurship skills, in addition to specifying the

long-term direction. The deployed bottom-up operative approach exploits knowledge of

experts and develops organizational capabilities for the purposes of strategic

management. According to the findings, the Case Company would be able to gain

competitive advantages, for example, via service differentiation and customer

collaboration. Furthermore, the management team would need relational capabilities

and the role of human resource management could be emphasized.

Chapters are not published in their full length in the Library version, since the

information in them is classified as confidential.

Keywords: strategic management, organizational capability

ABBREVIATIONS

2G 2

nd Generation Mobile System (usually GSM)

3G 3

rd Generation Mobile System (usually UMTS/WCDMA)

3GPP 3

rd Generation Partnership Project

ATM Asynchronous Transfer Mode

BI Business Intelligence

CI Competitive Intelligence

EU European Union

GSM Global System for Mobile Communications, Groupe Spécial Mobile

HR Human Resource

IMS IP Multimedia Subsystem

IP Internet Protocol

ISDN Integrated Services Digital Network

MBA Master of Business Administration

PLMN Public Land Mobile Network

PSTN Public Switched Telephone Network

QoS Quality of Service

R&D Research and Development

ROI Return on Investment

SWOT Strengths, Weaknesses, Opportunities and Threats

TDM Time Division Multiplexing

UMTS Universal Mobile Telecommunications System

VoIP Voice over IP

WCDMA Wideband Code Division Multiple Access

CONTENTS

ABSTRACT......................................................................................................................2

ABBREVIATIONS ..........................................................................................................3

1 INTRODUCTION .....................................................................................................6

1.1 Motivation and Background ......................................................................................6

1.2 Research Objectives, Research Questions and Main Findings..................................6

1.3 Research Methodology and Limitations of Study .....................................................8

1.4 Structure of Thesis.....................................................................................................9

2 LITERATURE REVIEW ........................................................................................10

2.1 Strategic Management .............................................................................................10

2.1.1 Generic Strategies......................................................................................12

2.1.2 Competitor Analysis..................................................................................13

2.1.3 Intangible Resources..................................................................................14

2.2 Knowledge and Organizational Capabilities............................................................15

2.3 Capability Development Model and Networking Capabilities................................17

2.4 Self-organizing Teams.............................................................................................19

3 ANALYTICAL FRAMEWORK.............................................................................21

3.1 External Strategic Evaluation ..................................................................................21

3.2 Internal Strategic Evaluation....................................................................................22

3.3 Strategic Suggestions...............................................................................................22

3.4 Opportunities for Improvement ...............................................................................22

4 RESEARCH METHODOLOGY ............................................................................23

4.1 Qualitative Research ................................................................................................23

4.2 Case Study Research................................................................................................24

4.3 Data Collection and Analysis Methods....................................................................25

5 CASE EVIDENCE ..................................................................................................27

5.1 External Strategic Evaluation ..................................................................................27

5.1.1 Competitive Environment, Technology View...........................................27

5.1.2 Competitive Strategy Formulation.............................................................28

5.1.3 Three Generic Strategies............................................................................32

5.1.4 Summary of External Strategic Evaluation ...............................................33

5.2 Internal Strategic Evaluation....................................................................................35

5.2.1 Case and Parent Company, Organization and Strategy View ...................35

5.2.2 Strategic Management in Case Company..................................................35

5.2.3 Operative Management in Case Company ................................................35

5.2.4 Summary of Internal Strategic Evaluation.................................................36

5.3 Exploration of Strategic Alternatives for Case Company........................................37

5.3.1 SWOT and Confrontation Matrix ..............................................................38

5.3.2 Strategic Suggestions.................................................................................41

5.4 Opportunities for Improvement ...............................................................................46

6 CONCLUSIONS .....................................................................................................49

6.1 Motivation and Background ....................................................................................49

6.2 Summary of Study ...................................................................................................50

6.3 Suggestions for Future Research .............................................................................53

REFERENCES................................................................................................................55

FIGURES ........................................................................................................................60

TABLES..........................................................................................................................61

6

1 INTRODUCTION

The motivation and background, as well as the research objectives of this Thesis are

described in the sections below. The research questions are introduced from the point of

view of their benefits and substance to the research objectives. Principal findings are

presented, as well as the applied research methodology and limitations. The structure of

the Thesis is introduced briefly, too.

1.1 Motivation and Background

It is important to be able to position an organization based on its manoeuvres and

capabilities in the current competitive business environment. The Case Company is a hi￾tech and product development enterprise in a global corporation. Its products are

designed to work in mobile networks. The impact of the Internet and fast mobile

networks is accelerating the evolution towards packet switched Internet Protocol

Multimedia Sub-system, IMS, based multimedia services (3GPP 2006, 4-8;

3GAmericas 2009, 7-10, 12-13). The central question is how the Case Company would

be able to sustain its credibility and competitiveness among other R&D, Research and

Development, companies. According to my knowledge, this type of investigation has

not been executed in a thorough and scientific way at the Case Company.

No gap can be identified from the previous research. However, no single research

article, study or book alone covers completely the research area of this Thesis.

Therefore, I use a number of different sources in the literature review to comprise the

theoretical framework. Applicability of the existing literature in the area of

organizational capability and opportunity exploitation for the purposes of creating

strategic alternatives in R&D is verified within the Thesis.

1.2 Research Objectives, Research Questions and Main Findings

The main objective of the Thesis is to explore the Case Company and to provide the

head of the organization with strategic alternatives and a development plan how to stay

competitive and become a preferred partner. The Thesis investigates how effectively the

organizational capabilities and external opportunities are exploited. The main

perspective is strategic management, but also the operative dimension is analyzed. The